If you’ve been on the fence about listing your home because you’re concerned about buyer activity, this could be the sign you’ve been waiting for.

After months of high mortgage rates keeping potential buyers sidelined, the market is starting to shift. Rates are declining due to several economic factors, and just yesterday, the Federal Reserve cut the Federal Funds Rate for the first time since their rate hikes began in March 2022. While the Fed doesn’t directly control mortgage rates, this move paves the way for further declines in borrowing costs. With more cuts expected next year, mortgage rates could drop even more, bringing buyers back to the market. As Lisa Sturtevant, Chief Economist at Bright MLS, explains:

“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”

The good news for you? This renewed buyer interest can work to your advantage.

As Rates Drop, Buyer Activity Increases

The graph below shows the correlation between falling mortgage rates and rising buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line tracks the Mortgage Bankers Association (MBA) Mortgage Application Index, which monitors the number of mortgage applications.

As mortgage rates (orange line) decrease, the Mortgage Application Index (blue line) rises, indicating that more people are resuming their homebuying journey (see graph below).

What This Means for You

According to the National Association of Realtors (NAR), home sales saw an increase in July, breaking a four-month streak of declines. This rise in buyer activity is a great opportunity if you’re a homeowner considering selling your house.

More buyers in the market mean greater competition, which could result in higher offers and a faster sale. Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), expects this trend to continue:

“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market.”

With the market becoming more accessible, this influx of buyers could make it the perfect time to sell your home.

Bottom Line

With mortgage rates dropping and buyer demand increasing, the market is shifting in favor of sellers. Experts predict this trend will continue, making now an ideal time to start preparing your home for sale. Let’s connect and take advantage of this growing buyer interest to get your house ready to sell.